Office space and less-sexy but crucial industrial facilities throughout metro Atlanta ended 2022 on an exceptionally high note, according to a new analysis by Cushman & Wakefield, a global commercial real estate services firm headquartered in Chicago.

Cushman & Wakefield’s industrial and office report for Q4 shows Atlanta recorded the strongest office space absorption in the country—and also greater industrial occupancy gains that any other U.S. market.

With offices, metro Atlanta logged 485,000 square feet of Q4 occupancy gains. That was boosted by two tenants in the central business district and three in suburban markets moving into spaces with more than 50,000 square feet, according to the report. None of those tenants are named, but logic says one is Switzerland-based IWG, the world’s largest provider of flexible workspaces, which took 56,000 square feet at Star Metals Offices in West Midtown last autumn.

The look of balconies at Signature at Star Metals and city views, as shown in renderings. Courtesy of IWG

Nonetheless, a separate Q4 analysis by CBRE found that metro Atlanta’s office vacancy rate ticked up slightly to 23.6 percent over Q3 numbers. (On a brighter note, the market’s year-to-date net absorption of 1.13 million square feet trounced the 125,823 square feet recorded in 2021, per CBRE.) 

Concerning industrial spaces, Cushman & Wakefield found that companies in metro Atlanta absorbed 9.2 million square feet in Q4, continuing a strong performance in the industrial sector. More than 29 million square feet of industrial space was absorbed across all of 2022, the analysis found.

Other highlights from Cushman & Wakefield’s findings:  

Office

  • Vacancy remained unchanged (22.4 percent) in Q4, per Cushman & Wakefield's report.
  • Nearly 2.5 million square feet of creative office product delivered throughout 2022. Of that, about 46 percent was pre-leased. “Construction remains underway on an additional 1.9 million square feet, including seven creative office projects in Midtown,” per the report.
  • Office rents continued climbing. The Class A direct average asking rent rose 4.3 percent across 2022 to a new high of $34.21 per square foot.
  • Towers 100,000 square feet or more built (or substantially renovated) since 2020 commanded an average of $51.18 per square foot, while towers built before 2000 averaged $32.96 per square foot.  

Industrial

  • The market for new supply is 74 percent pre-leased. Throughout 2022, 31.1 million square feet of new construction was completed across Atlanta—the second highest in the nation, per the report.
  • Vacancy remained in the low 3-percent range in Q4, on par with the U.S. average.
  • Four new large leases of 400,000 square feet or more were inked in Q4.
  • Average rents climbed to $7.05 per square foot. “The direct average rental rate increased 13.9 percent YOY,” analysts found, “but Atlanta still offers a substantial discount below most other top-tier industrial markets.”  

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